BILL NUMBER: SB 2166	CHAPTERED  09/30/00

	CHAPTER   1012
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 29, 2000
	PASSED THE ASSEMBLY   AUGUST 21, 2000
	PASSED THE SENATE   MAY 24, 2000
	AMENDED IN SENATE   MAY 9, 2000

INTRODUCED BY   Senator Sher

                        FEBRUARY 25, 2000

   An act to amend Sections 1785.11 and 1785.13 of the Civil Code,
relating to consumer credit.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 2166, Sher.  Consumer credit.
   Existing law authorizes a consumer credit reporting agency to
furnish consumer credit reports only under specified circumstances.
   This bill would make clarifying changes to these provisions.
   Existing law prohibits credit reporting agencies from providing
consumer credit reports containing certain items of information, and
specifically prohibits a consumer reporting agency from including
medical information in a consumer credit report provided for
employment or credit purposes.
   This bill would also prohibit a consumer reporting agency from
including medical information in a consumer credit report provided
for insurance purposes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1785.11 of the Civil Code is amended to read:
   1785.11.  (a) A consumer credit reporting agency shall furnish a
consumer credit report only under the following circumstances:
   (1) In response to the order of a court having jurisdiction to
issue an order.
   (2) In accordance with the written instructions of the consumer to
whom it relates.
   (3) To a person whom it has reason to believe:
   (A) Intends to use the information in connection with a credit
transaction, or entering or enforcing an order of a court of
competent jurisdiction for support, involving the consumer as to whom
the information is to be furnished and involving the extension of
credit to, or review or collection of an account of, the consumer; or

   (B) Intends to use the information for employment purposes; or
   (C) Intends to use the information in connection with the
underwriting of insurance involving the consumer, or for insurance
claims settlements; or
   (D) Intends to use the information in connection with a
determination of the consumer's eligibility for a license or other
benefit granted by a governmental instrumentality required by law to
consider the applicant's financial responsibility or status; or
   (E) Intends to use the information in connection with the hiring
of a dwelling unit, as defined in subdivision (c) of Section 1940; or

   (F) Otherwise has a legitimate business need for the information
in connection with a business transaction involving the consumer.
   (b) A consumer credit reporting agency may furnish information for
purposes of a credit transaction specified in subparagraph (A) of
paragraph (3) of subdivision (a), where it is a credit transaction
that is not initiated by the consumer, only under the circumstances
specified in paragraph (1) or (2), as follows:
   (1) The consumer authorizes the consumer credit reporting agency
to furnish the consumer credit report to the person.
   (2) The proposed transaction involves a firm offer of credit to
the consumer, the consumer credit reporting agency has complied with
subdivision (d), and the consumer has not elected pursuant to
paragraph (1) of subdivision (d) to have the consumer's name excluded
from lists of names provided by the consumer credit reporting agency
for purposes of reporting in connection with the potential issuance
of firm offers of credit.  A consumer credit reporting agency may
provide only the following information pursuant to this paragraph:
   (A) The name and address of the consumer.
   (B) Information pertaining to a consumer that is not identified or
identifiable with a particular consumer.
   (c) Except as provided in paragraph (2) of subdivision (a) of
Section 1785.15, a consumer credit reporting agency shall not furnish
to any person a record of inquiries solely resulting from credit
transactions that are not initiated by the consumer.
   (d) (1) A consumer may elect to have his or her name and address
excluded from any list provided by a consumer credit reporting agency
pursuant to paragraph (2) of subdivision (b) by notifying the
consumer credit reporting agency, by telephone or in writing, through
the notification system maintained by the consumer credit reporting
agency pursuant to subdivision (e), that the consumer does not
consent to any use of consumer credit reports relating to the
consumer in connection with any transaction that is not initiated by
the consumer.
   (2) An election of a consumer under paragraph (1) shall be
effective with respect to a consumer credit reporting agency, and any
affiliate of the consumer credit reporting agency, on the date on
which the consumer notifies the consumer credit reporting agency.
   (3) An election of a consumer under paragraph (1) shall terminate
and be of no force or effect following notice from the consumer to
the consumer credit reporting agency, through the system established
pursuant to subdivision (e), that the election is no longer
effective.
   (e) Each consumer credit reporting agency that furnishes a
prequalifying report pursuant to subdivision (b) in connection with a
credit transaction not initiated by the consumer shall establish and
maintain a notification system, including a toll-free telephone
number, that permits any consumer, with appropriate identification
and for which the consumer credit reporting agency has a file, to
notify the consumer credit reporting agency of the consumer's
election to have the consumer's name removed from any list of names
and addresses provided by the consumer credit reporting agency, and
by any affiliated consumer credit reporting agency, pursuant to
paragraph (2) of subdivision (b).  Compliance with the requirements
of this subdivision by a consumer credit reporting agency shall
constitute compliance with those requirements by any affiliate of
that consumer credit reporting agency.
   (f) Each consumer credit reporting agency that compiles and
maintains files on consumers on a nationwide basis shall establish
and maintain a notification system under paragraph (1) of subdivision
(e) jointly with its affiliated consumer credit reporting agencies.

  SEC. 2.  Section 1785.13 of the Civil Code is amended to read:
   1785.13.  (a) No consumer credit reporting agency shall make any
consumer credit report containing any of the following items of
information:
   (1) Bankruptcies that, from the date of adjudication, antedate the
report by more than 10 years.
   (2) Suits and judgments that, from the date of entry or renewal,
antedate the report by more than seven years or until the governing
statute of limitations has expired, whichever is the longer period.
   (3) Unlawful detainer actions, unless the lessor was the
prevailing party.  For purposes of this paragraph, the lessor shall
be deemed to be the prevailing party only if (A) final judgment was
awarded to the lessor (i) upon entry of the tenant's default, (ii)
upon the granting of the lessor's motion for summary judgment, or
(iii) following trial, or (B) the action was resolved by a written
settlement agreement between the parties that states that the
unlawful detainer action may be reported.  In any other instance in
which the action is resolved by settlement agreement, the lessor
shall not be deemed to be the prevailing party for purposes of this
paragraph.
   (4) Paid tax liens that, from the date of payment, antedate the
report by more than seven years.
   (5) Accounts placed for collection or charged to profit and loss
that antedate the report by more than seven years.
   (6) Records of arrest, indictment, information, misdemeanor
complaint, or conviction of a crime that, from the date of
disposition, release, or parole, antedate the report by more than
seven years.  These items of information shall no longer be reported
if at any time it is learned that in the case of a conviction a full
pardon has been granted, or in the case of an arrest, indictment,
information, or misdemeanor complaint a conviction did not result.
   (7) Any other adverse information that antedates the report by
more than seven years.
   (b) The seven-year period specified in paragraphs (5) and (7) of
subdivision (a) shall commence to run, with respect to any account
that is placed for collection (internally or by referral to a third
party, whichever is earlier), charged to profit and loss, or
subjected to any similar action, upon the expiration of the 180-day
period beginning on the date of the commencement of the delinquency
that immediately preceded the collection activity, charge to profit
and loss, or similar action.  Where more than one of these actions is
taken with respect to a particular account, the seven-year period
specified in paragraphs (5) and (7) shall commence concurrently for
all these actions on the date of the first of these actions.
   (c) Any consumer credit reporting agency that furnishes a consumer
credit report containing information regarding any case involving a
consumer arising under the bankruptcy provisions of Title 11 of the
United States Code shall include an identification of the chapter of
Title 11 of the United States Code under which the case arose if that
can be ascertained from what was provided to the consumer credit
reporting agency by the source of the information.
   (d) A consumer credit report shall not include any adverse
information concerning a consumer antedating the report by more than
10 years or that otherwise is prohibited from being included in a
consumer credit report.
   (e) If a consumer credit reporting agency is notified by a
furnisher of credit information that an open-end credit account of
the consumer has been closed by the consumer, any consumer credit
report thereafter issued by the consumer credit reporting agency with
respect to that consumer, and that includes information respecting
that account, shall indicate the fact that the consumer has closed
the account.  For purposes of this subdivision, "open-end credit
account" does not include any demand deposit account, such as a
checking account, money market account, or share draft account.
   (f) Consumer credit reporting agencies shall not include medical
information in their files on consumers or furnish medical
information for employment, insurance, or credit purposes in a
consumer credit report without the consent of the consumer.
   (g) A consumer credit reporting agency shall include in any
consumer credit report information, if any, on the failure of the
consumer to pay overdue child or spousal support, where the
information either was provided to the consumer credit reporting
agency pursuant to Section 4752 or has been provided to the consumer
credit reporting agency and verified by another federal, state, or
local governmental agency.
